Did the NY Fed Know About Barclays Interest Rate Fixing?

[usmcstinger]

Barclays Employee to NY Fed, 2008: “we know that we’re not posting um, an honest Libor”

Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity, which persisted through 2009 [...]

Who was the President of the NY Fed during this period?
Tim Geithner our Current Sec Treasury.

Is it a crime to knowingly allow an illegal activity to take place?

 

[expat_panama]

Barclays Employee to NY Fed, 2008: “we know that we’re not posting um, an honest Libor” Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity...

All the pompous snarky drivel hit me with a super temptation to respond in kind, but maybe there're some here who work for a living and care about economics. First, we got to understand what the LIBOR is. From here:

Definition of 'London Interbank Offered Rate - LIBOR'
An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.

Read more: London Interbank Offered Rate (LIBOR) Definition | Investopedia​

It's outside US jurisdiction. Even in the UK what we're talking about is a private non-compulsory association average. Anyone interested can read more at About The Alleged LIBOR "Scandal", Back Away From The Cliff - Forbes

 

[boedicca]

Geithner knew. He claims he told the Bank of England. They claim all he provided were generic recommendations (which the documentation supports).

Why would Geithner claim he warned them years if he didn't know what was going on back then?

 

[georgephillip]

Elizabeth Warren's take on LIBOR:

"It gets worse. During the financial crisis, Barclays and other banks also appear to have consistently manipulated Libor to show lower-than-real borrowing rates to convince the world — and their regulators — that the bank was stronger than it really was. In other words, they rigged the interest-rate reports so that no one would know exactly how much trouble they were in.

"With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

"Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.

"Going forward, the rules would be changed so that Libor is calculated on actual borrowing costs, not estimated or claimed costs. And enforcement agencies would have the resources they need to launch investigations, to fight the armies of private lawyers the banks hire and to prosecute the law-breakers."

Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

 

[expat_panama]

Elizabeth Warren's take on LIBOR...

Probably like her take on her Cherokee ancestry--

--where although we find none of her ancestors were tribe members, some were soldiers that drove Cherokee tribes off their lands onto the 'Trail of Tears'.

 

[CrusaderFrank]

Elizabeth Warren's take on LIBOR...

Probably like her take on her Cherokee ancestry--

--where although we find none of her ancestors were tribe members, some were soldiers that drove Cherokee tribes off their lands onto the 'Trail of Tears'.

I found Liz's Harvard Yearbook pic. Note the high cheekbones

 

[CrusaderFrank]

Elizabeth Warren's take on LIBOR:

"It gets worse. During the financial crisis, Barclays and other banks also appear to have consistently manipulated Libor to show lower-than-real borrowing rates to convince the world — and their regulators — that the bank was stronger than it really was. In other words, they rigged the interest-rate reports so that no one would know exactly how much trouble they were in.

"With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

"Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.

"Going forward, the rules would be changed so that Libor is calculated on actual borrowing costs, not estimated or claimed costs. And enforcement agencies would have the resources they need to launch investigations, to fight the armies of private lawyers the banks hire and to prosecute the law-breakers."

Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

Clearly, Warren's Cherokee ancestry prevents her from finding out who Timmy Geithner is.

 

[EdwardBaiamonte]

the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

Of course thats perfectly liberal and stupid. We have capitalism to fix Wall Street. Warren Buffet has always said , if I cant understand it I don't buy it. Wall Street is dead and buried tomorrow if people don't trust it.

 

[georgephillip]

Elizabeth Warren's take on LIBOR...

Probably like her take on her Cherokee ancestry--

--where although we find none of her ancestors were tribe members, some were soldiers that drove Cherokee tribes off their lands onto the 'Trail of Tears'.

Probably banks in Bermuda or Panama...

"In most markets, consumers could simply take their business elsewhere once they learned that the scales were rigged. But interest rates are different. Everyone who borrows money on a mortgage, credit card, student loan, car loan or small-business loan — basically, everyone — is affected by a crooked market on Libor.

"According to the Federal Reserve Bank of Cleveland, in 2008 more than half of all adjustable-rate mortgages were linked to Libor. Even those who didn’t borrow but saved for retirement or their children’s future got hit with interest rates that had been faked."

Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

 

[georgephillip]

Elizabeth Warren's take on LIBOR:

"It gets worse. During the financial crisis, Barclays and other banks also appear to have consistently manipulated Libor to show lower-than-real borrowing rates to convince the world — and their regulators — that the bank was stronger than it really was. In other words, they rigged the interest-rate reports so that no one would know exactly how much trouble they were in.

"With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

"Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.

"Going forward, the rules would be changed so that Libor is calculated on actual borrowing costs, not estimated or claimed costs. And enforcement agencies would have the resources they need to launch investigations, to fight the armies of private lawyers the banks hire and to prosecute the law-breakers."

Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

Clearly, Warren's Cherokee ancestry prevents her from finding out who Timmy Geithner is.

At your next seance why don't you ask Brian if he still appreciates Libor?

"We learned about Kerry Kennedy’s thyroid medication and sleeping medication; nothing about how Federal Reserve Chairman Ben Bernanke was criticized for comments on Libor in Tuesday testimony on Capitol Hill. "

If Brian's still dead, why don't you run the question by Helicopter Ben?

Libor, still underappreciated - Erik Wemple - The Washington Post

 

[georgephillip]

the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

Of course thats perfectly liberal and stupid. We have capitalism to fix Wall Street. Warren Buffet has always said , if I cant understand it I don't buy it. Wall Street is dead and buried tomorrow if people don't trust it.

Wall Street was born dead, not unlike your ability to reason.
Rich people trust it; that's the only reason it remains unburied.
Not unlike your pathic conservative platitudes.

 

[expat_panama]

..."According to the Federal Reserve Bank of Cleveland, in 2008 more than half of all adjustable-rate mortgages were linked to Libor. Even those who didn’t borrow but saved for retirement or their children’s future got hit with interest rates that had been faked." Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

AW NOW WE'RE DONE FOR!!!!
Seriously, what that really means is we supposedly got frauds hidden in mortgages according to the Fed as stated by a professional liar who's featured in the (choke choke) Washington Post of all places. So screaming and shouting may be all well and good for the high-cheek-bones tribe, but money handling adults think with numbers from here:

--and we're able to figure out that if the LIBOR was rigged, than home borrowers would be gaining with low rates while those mean old banks would be losing money.


Ain't happening.

 

[georgephillip]

While the low IQ crew will continue swallowing too big to fail?

"The Libor rigging came in two flavors, but rarely have two parts so well crystallized the problems in regulatory and banking culture. The less sinister of the two bouts of rigging is the later one, from 2008, when Barclays and a number of other banks allegedly kept their rates low to hide the poor state of their balance sheets.

"On its own, this is bad enough: Though keeping the interest rates low helped consumers in the short run, they disguised the extent to which the banks were in danger.

"Worse, though, is emerging evidence suggesting that some regulators may have encouraged banks to keep those rates artificially low .

"As Noam Scheiber noted , the rigging shows once again that,
in order to get corruption in your banking system, you don’t need literal corruption of the Government Official X owns shares in Bank Y variety (or even Official X wants to work at Bank Y after he leaves government).

"You just need banks big enough so that the bureaucrats keeping an eye on them have nightmares about what happens if the banks fail. At that point the bureaucrats will dedicate themselves to keeping the megabanks afloat at all costs, even it requires methods that aren’t on the up and up."

The banking scandal Wall Street fears - PostPartisan - The Washington Post

 

[expat_panama]

...more than half of all adjustable-rate mortgages were linked to Libor...

...if the LIBOR was rigged, than home borrowers would be gaining with low rates while those mean old banks would be losing money...

...Though keeping the interest rates low helped consumers in the short run, they disguised the extent to which the banks were in danger...

Huh, Barclays intentionally lost money on mortgage borrower's payments because they wanted to keep secret the fact that they were losing money. Aside from how goofy that sounds, here's Barclay's annual profits in $millions over the past 5 years:

2008 _$6,813
2009 $14,603
2010 _$5,541
2011 _$4,675
2012 $10,216
​

What losses are they exactly hiding here?

 

[georgephillip]

...more than half of all adjustable-rate mortgages were linked to Libor...

...if the LIBOR was rigged, than home borrowers would be gaining with low rates while those mean old banks would be losing money...

...Though keeping the interest rates low helped consumers in the short run, they disguised the extent to which the banks were in danger...

Huh, Barclays intentionally lost money on mortgage borrower's payments because they wanted to keep secret the fact that they were losing money. Aside from how goofy that sounds, here's Barclay's annual profits in $millions over the past 5 years:

2008 _$6,813
2009 $14,603
2010 _$5,541
2011 _$4,675
2012 $10,216
​

What losses are they exactly hiding here?

Who supplied the numbers for those annual profits over the last five years?
The same people who were simultaneously setting and betting on Libor rates?

"It takes little effort or intelligence to make a profit when you’re setting a rate and betting on that rate at the same time, or to scam cities when you’re bribing city officials, or to sell millions of dollars in worthless bonds when you’ve neutered the rating industry that is supposed to grade them..."

"The Libor scandal is teaching once again (and to an ever-wider audience) that lesson the big banks most fear people taking to heart: Their industry, right now, is rotten to the core. "

The banking scandal Wall Street fears - PostPartisan - The Washington Post

 

[EdwardBaiamonte]

Their industry, right now, is rotten to the core. "

but so were all soviet industries because they had too much regulation.

Everyone simply assumed LIBOR was accurate because everyone assumed the government had it regulated. THe banks have always had numerous regulators in residence as did the soviet union but nothing beats 310 million regulators!!

Got it now? I feel like I am opening up whole new worlds to you!! See why we are positive liberalism is based on pure ignorance?

 

[georgephillip]

Their industry, right now, is rotten to the core. "

but so were all soviet industries because they had too much regulation.

Everyone simply assumed LIBOR was accurate because everyone assumed the government had it regulated. THe banks have always had numerous regulators in residence as did the soviet union but nothing beats 310 million regulators!!

Got it now? I feel like I am opening up whole new worlds to you!! See why we are positive liberalism is based on pure ignorance?

"The following demographic statistics are from the 1990 edition of the CIA World Factbook,[1] unless otherwise indicated. (Note: The CIA did not include the Baltic states in its statistic calculations.)

Soviet Union and Former Soviet Union Population from 1961–2009.
[edit]Population
Population: 290,938,469 (July 1990)

290,938,469 regulators weren't enough?
How many daily Libors were calculated in the USSR?
More than today?
Is there no end to your corporate banality?

Demography of the Soviet Union - Wikipedia, the free encyclopedia

 

[whitehall]

Barry Hussein's Treasury Secretary admits he is too dumb to fill out an IRS form. Does that tell you all you need to know about enforcement of the financial network?

 

[usmcstinger]

House Finance Committee Hearing
Rep. Randy Neugebauer (R-Texas) revealed that there are reports of emails about the fixing of the Libor rate dating back to the fall of 2007. Geithner claimed that he only remembered hearing about it in 2008, but said that he is reviewing his earlier emails. Neugebauer stressed that what was involved was not merely a structural problem but was fraud and referring to the comments by the former special counsel to the FFCIC asked Geithner, did he not have an obligation to make a criminal referral? b~~~~While a number of Democrats were soft on Geithner's responsibility for Liborgate, in some cases trying to blame it on the Bush administration and thus let Geithner off the hook, Brad Miller (D-NC) pointed out that the emails reveal not just an opportunity for manipulation of the rates, but an actual criminal act. He then repeated the question first posed by Bachus, which Geithner did not answer. Did you report this to Justice? Geithner initially tried to squirm out of answering the questin by saying that he did not know what the NY Fed staff did. But Miller pressed him and asked specifically whether he, Timothy Geithner, reported it to the Justice Department. Geithner's answer says it all: "No, I did not."

 

[georgephillip]

"According to news reports, UK banks fixed the London interbank borrowing rate (Libor) with the complicity of the Bank of England (UK central bank) at a low rate in order to obtain a cheap borrowing cost..."

"Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates."

The Real Libor Scandal » Counterpunch: Tells the Facts, Names the Names

One day soon, one of these scandals will CRASH the global economy loudly enough to focus your attention the same way 911 did...Who will you blame?